Citation Nr: 9834524
Decision Date: 11/23/98 Archive Date: 12/01/98
DOCKET NO. 96-34782 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Phoenix,
Arizona
THE ISSUE
Whether the veteran is entitled to interest on the payment of
Department of Veterans Affairs (VA) disability compensation
based on a grant of service connection (and 10 percent
evaluations) for low back and right knee disabilities,
effective from November 18, 1986.
REPRESENTATION
Appellant represented by: Disabled American Veterans
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
Stephen F. Sylvester, Counsel
INTRODUCTION
The veteran served on active duty from May 1977 to August
1984.
CONTENTIONS OF APPELLANT ON APPEAL
The veteran’s argument is that the Regional Office (RO)
committed error in denying entitlement to interest in the
amount of $3,500.00, or, in the alternative, $9,100.00, based
on a grant of service connection (and respective 10 percent
evaluations) for low back and right knee disabilities,
effective from November 18, 1986. More specifically, it is
contended that the RO has and continues to deny the payment
of “back interest” on the veteran’s “nine-year old claim,”
and that, pursuant to various provisions of the Federal Tort
Claims Act, the Civil Rights Act of 1968, and the veteran’s
past “underlying contract” with the U.S. Army, he is
entitled to such interest.
DECISION OF THE BOARD
The Board of Veterans’ Appeals (Board), in accordance with
the provisions of 38 U.S.C.A. § 7104 (West 1991 & Supp.
1998), has reviewed and considered all of the evidence and
material of record in the veteran's claims file(s). Based on
its review of the relevant evidence in this matter, and for
the following reasons and bases, it is the decision of the
Board that the veteran’s appeal is not supported by law.
FINDINGS OF FACT
1. In a decision of October 1995, the Board granted service
connection for low back and right knee disabilities.
2. In a rating decision of January 1996, which decision
effectuated the Board’s October 1995 decision, the RO granted
service connection and respective 10 percent evaluations for
the veteran’s low back and right knee disabilities, effective
from November 18, 1986.
3. Absent statutory or regulatory authority, there is no
entitlement to interest on the payment of VA disability
compensation.
CONCLUSION OF LAW
The veteran’s claim for interest on the payment of VA
disability compensation based on a grant of service
connection (and 10 percent evaluations) for low back and
right knee disabilities is without legal merit. 38 U.S.C.A.
§§ 511, 7104, 7105 (d)(5), 7108 (West 1991 and Supp.1998);
38 C.F.R. §§ 19.4, 19.5, 20.101 (1998).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The veteran contends that he should receive interest on the
“back pay” award resulting from the grants of service
connection for his low back and right knee disabilities,
inasmuch as such “back pay” covered a period dating from
November 18, 1986. In that regard, the Board has
jurisdiction to decide questions of law and fact necessary to
decisions under a law which affects the provision of benefits
by the VA to veterans, their survivors, or dependents.
38 U.S.C.A. §§ 511, 7104 (West 1991 and Supp. 1998).
Questions such as a veteran’s basic eligibility for VA
benefits or his entitlement to VA disability compensation are
within the Board’s jurisdiction.
A review of the record in this case discloses that, pursuant
to an October 1995 Board decision, the RO, in a decision of
January 1996, granted service connection and respective 10
percent evaluations for the veteran’s low back and right knee
disabilities, effective from November 18, 1986. This
reportedly resulted in a payment to the veteran of “back
benefits” in the amount of $16,362.00, the interest on which
is the subject of this appeal. Of some significance is the
fact that the veteran does not disagree with the amount of VA
disability compensation paid as the result of the January
1996 rating decision; rather, his appeal rests exclusively on
the issue of whether he is entitled to interest on the
aforementioned sum.
The Board observes that, while 38 U.S.C.A. § 1110 (West 1991
and Supp. 1998) authorizes the VA Secretary to make payments
of disability compensation, there is no statute authorizing
the Secretary to make payments of interest on such awards.
While it is true that, under some circumstances, such as
where authorized by statute, interest has been paid by
certain government agencies, such cases have involved the so-
called “commercial activity exemption,” allowing for the
payment of interest where the government has “cast off the
cloak of sovereignty and assumed the status of a private
commercial enterprise.” See Vail et. al. v. Brown, 841 F.
Supp. 909 (1994). In a case such as the one at hand, where
there are no Constitutional requirements, and the
“commercial activity exemption” is not for application, any
allowance for the payment of interest on a claim against the
United States requires an explicit waiver of sovereign
immunity by Congress. Fidelity Construction Co. v. United
States, 700 F.2d 1379, 1783 (Fed. Cir. 1983).
The Supreme Court has repeatedly upheld the limitation on
payment of interest by the Government. The no-interest
exceptions have been expressly defined. The United States
may only pay interest pursuant to a contract, in
circumstances authorized by a statute, where the Government
has consented to do so, where there has been a taking under
the Fifth Amendment, or where the Government operates as a
commercial entity. Library of Congress v. Shaw, 478 U.S.
310, 317 (1986); United States v. Louisiana, 446 U.S. 253,
264-265 (1980); Smyth v. United States, 302 U.S. 329, 353
(1937).
There is no statute cited by the veteran which provides for
the payment of interest by the Department of Veterans Affairs
on disability compensation awards. The reference to the
Federal Torts Claims Act (28 U.S.C.A. § 2674) has no
application to VA compensation payments and precludes payment
of pre-judgment interest in any event. The VA has not
elsewhere consented to pay interest on retroactive
compensation distributions, and it is not advanced that the
VA’s disability compensation program is a business or
commercial enterprise. The argument has been made that the
veteran’s military service in essence constituted a
“contract” with the Government, initially with the
Department of the Army and then derivatively with the VA.
The extent to which the Government was obligated to provide
health care and other services arising out of the veteran’s
active duty is not the issue. The dispositive consideration
is that no government entity agreed to pay interest to
veterans in connection with the resolution of monetary claims
attendant to such service.
The veteran has also put forward the argument that the time
involved from the claim to the award causes the matter to
have a constitutional dimension and thus fall within an
exception to the no-interest rule. The short answer is that
there was no “taking” because the veteran had no property
interest to be taken before his claim was favorably resolved.
An expectation, even a well-founded expectation, of a
successful disposition of his disability claim is not
“property.” He has presented no persuasive legal authority
on this point.
ORDER
The appeal is dismissed.
John E. Ormond, Jr.
Member, Board of Veterans' Appeals
NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 7266 (West
1991 & Supp. 1998), a decision of the Board of Veterans'
Appeals granting less than the complete benefit, or benefits,
sought on appeal is appealable to the United States Court of
Veterans Appeals within 120 days from the date of mailing of
notice of the decision, provided that a Notice of
Disagreement concerning an issue which was before the Board
was filed with the agency of original jurisdiction on or
after November 18, 1988. Veterans' Judicial Review Act,
Pub. L. No. 100-687, § 402, 102 Stat. 4105, 4122 (1988). The
date which appears on the face of this decision constitutes
the date of mailing and the copy of this decision which you
have received is your notice of the action taken on your
appeal by the Board of Veterans' Appeals.
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